STUMP » Articles » Illinois Finances: Budget?! We Don't Need No Stinkin Budget! » 18 April 2017, 11:52

While I live in a state that never gets its budget in on time, at least we don’t let it go for a couple years:

On June 30, 2016, 5:18pm, a temporary budget was passed.

Governor Rauner’s office announced he’s signed a temporary, patchwork-of-a-budget into law. It’s 11 months, 30 days, 17 hours, 18 minutes late.

At midnight July 1st, it would have been one year. Maybe Gov. Rauner and Democratic leadership in the legislature just didn’t want to face those headlines in the morning. Whatever the sudden source of urgency after so many months—here’s to hoping this will bring some relief to those who have been suffering through this game of chicken.

Here’s the thing, y’all. Yes, K-12 education is funded for a year. And you’ll be happy to know state legislators will likely be paid. But social services are still only 65% funded through the end of the year. What will fall into the 35% gulf?

And what will happen at the end of the year? What can we expect for funding the rest of 2017, and then 2018? Is this just how Illinois State government will (not) function, from now on?

With the budget punted until after the Nov 8 election, state legislators will now take this problem on the campaign trail. Let’s make sure they know we’ll be thinking of that other 35% in the voting booth.

Oh wait. That was posted back in 2016. The November 8 being mentioned was the 2016 election. I went to their github site to see if anybody had updated that open source code. The last commit was on July 1, 2016. They should’ve started running the clock again!

But okay, maybe something happened in the 2016 election.

WHO GOT ELECTED AND WHAT GOT VOTED FOR IN ILLINOIS IN 2016

Checking Ballotpedia, a variety of state offices were up for re-election, in addition to the federal elections we all know about.

Let’s see the summary results:

As a result of the 2016 election, the state government of Illinois maintained divided partisan control. With a Republican governor, Democrats maintained control of the state Senate with 37 seats to Republicans’ 22 seats. Democrats maintained control of the state House with 67 seats to Republicans’ 51 seats.

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Illinois is one of 26 states, as well as Washington, D.C., that offer initiative and/or veto referendum rights for its citizens. One statewide ballot measure was certified for the ballot in 2016. It was approved.

The state referendum was the Transportation Taxes and Fees Lockbox Amendment, intended to keep the Illinois legislature from siphoning off transportation-related fees/taxes for non-transportation purposes.

The amendment passed with almost 80% approval. That’s high.

I want to point out the following arguments against the measure:

Rep. Barbara Flynn Currie (D-25), Rep. Laura Fine (D-17), Rep. Elaine Nekritz (D-57), Rep. Pamela Reaves-Harris (D-10) were the four legislators who voted against placing the amendment on the ballot. In an op-ed, the legislators explained their reasoning:
“ We were the four votes in the General Assembly against placing this question on the ballot. We did so not because we don’t value transportation as a critical component of a strong economy. Without a doubt, there should be strong protections for investment in our road, bridges, ports, and rails.

“But experience has demonstrated that unexpected events can have drastic impacts on our state budget. A major natural disaster or economic turmoil can blow huge holes in a budget, even in states in healthy financial condition – which Illinois is decidedly not.
This amendment would severely curtail the ability of the state to react to these types of events. If a school can’t open because of insufficient funding, what good is the new state road that runs by? How are farmers served by new bridges if our state universities aren’t educating the next generation of agricultural experts? A new bus or train line won’t help a young parent get to her job or class if she can’t afford safe, reliable childcare.

“Other states that have passed transportation funding lockboxes, such as Maryland, have release valves for emergencies. There, the governor and a supermajority of legislators can declare a fiscal emergency. In that instance, the threshold for tapping into transportation funds for general purposes can only be reached when there is broad consensus for the need to do so. The proposed Illinois amendment is missing a safety valve.

“Constitutions are meant to be broad documents. State governments are intended to serve as laboratories of democracy. Enshrining this type of language in our state’s core legal document undermines the ability of elected officials in the future to respond to the challenges of the day.”

Greg Hinz, politics and government columnist for Crain’s Chicago Business, argued:

“ A few decades ago, with good intentions, Illinois added a restrictive spending section to its constitution. It’s known as the pension clause, and, largely thanks to it, paying workers excessive retirement benefits now is a higher priority than schools, health care, law enforcement and other needs.

“The Safe Roads Amendment is the pension clause on steroids. Vote “no.“”

Jim Dey, an author for the News-Gazette, wrote the following in a column about HJRCA 36:

“ The amendment is unnecessary. All legislators have to do to stop raids on the transportation fund is to stop raiding the transportation fund. ”

Nobody trusts the legislators. Though, of course, they mainly got re-elected.

But here’s a key change due to the election: the state comptroller:

Leslie Munger, the current officeholder, was appointed in January 2015 by Gov. Bruce Rauner ® to replace interim Comptroller Jerry Stermer, who was appointed following the death of Judy Baar Topinka in December 2014.

Munger ran unopposed in the Republican primary and competed with Democrat Susana Mendoza, who also ran unopposed; Green Party candidate Tim Curtin; and Libertarian Claire Ball in the November 8 general election. Mendoza won the general election on November 8, 2016.

Mendoza had 49% of the vote.

I wrote about Munger before, about a year ago:

My lunch hour is about up, so let me spend my remaining few minutes with Illinois.

I know it’s an arm-twisting trick on the part of the comptroller, but HA HA:

“Comptroller says Illinois lawmakers will have to get in a long line to get paid

“Illinois Comptroller Leslie Geissler Munger plans to delay monthly paychecks for lawmakers and statewide officials, saying there isn’t enough money to pay the state’s bills and that other services should come first.

“The comptroller’s office will still process the paychecks, estimated at $1.3 million a month, but lawmakers won’t get the money right away because the payments will be thrown onto the state’s huge pile of unpaid bills.

“Munger acknowledged the idea is to apply pocketbook political pressure to lawmakers to spur a resolution to the 10-month budget fight between Republican Gov. Bruce Rauner and Democrats led by House Speaker Michael Madigan and Senate President John Cullerton. She argued that lawmakers’ paychecks are taking away money from nonprofit social service providers and small businesses who have seen their payments delayed during the impasse.”

Again, that was a year ago. At the time, I noted a $7.5 billion backlog in funds payable.

The unpaid bills tracker is still there.

Here’s a screenshot:

Good thing Mendoza didn’t change that. Good tool to keep.

ONE CHANGE IN POLICY: THE POLITICIANS GET PAID

But obviously with a Dem coming into the executive branch, and not particularly wanting to support Rauner’s policy, there have been changes.

No Budget? Sure, We’ll Pay Pols:

No budget-no pay, kind of-sort of: Oddly, both of the major candidates who ran for comptroller last year, incumbent Republican Leslie Munger (who in 2016 put legislative salaries at the back of that long line of bills to be paid because they couldn’t pass a budget and whose needs were not among the state’s most pressing) and Mendoza, each ran on a promise of no budget-no pay.

And that all sounded pretty good. Eerily similar, and oddly unoriginal, but pretty good.

But here’s what you missed while you were surfing for houses in another state on Realtor.com:

On March 23, Circuit Court Judge Rodolfo Garcia ordered that lawmakers and elected state officials be moved to the front of the state’s backlog of unpaid bills and then paid out the $8.6 million owed to them from 2016. Effectively, with that decision he moved lawmakers to the front of the queue. Judges don’t have to say why they do what they do, and, well, whatever.

On March 24, Mendoza’s comptroller’s office started paying legislators. Like, seriously, less than 24 hours later, the checks began to roll out. And they continued to roll, until…

On March 29, Mendoza, having already given the okeydokey to release money to legislators and presumably having had five nights to sleep on it, appealed the judge’s decision through Attorney General Lisa Madigan.

And the legislators continue, as of today, to be paid.

Per our Greg Bishop’s reporting this week, the spigot remained open on lawmaker pay and taxpayers have paid them about $12 million – including all (somewhere in the neighborhood of $8.6 million) of their back pay from 2016.

Mendoza herself has received $44,000 in pay, Bishop learned. Follow the link to his story, and you can see who was paid what.

So here’s Greg Bishop’s reporting:

Illinois comptroller issues self, lawmakers paychecks despite appeal of circuit court’s ruling

Illinois lawmakers will continue to get their paychecks on time despite an appeal of last month’s ruling that they be paid before vendors or social services that are owed almost $13 billion.

On March 23, a Cook County Circuit Court judge sided with several Democratic lawmakers, saying despite no budget and a massive backlog of bills, lawmakers should be paid before vendors and social services.

Comptroller Susana Mendoza started issuing millions of dollars worth of backpay in the following days.

On March 28, Attorney General Lisa Madigan filed an appeal. That didn’t stop the paychecks. Records obtained by Illinois News Network through a Freedom of Information Act request show payments were issued as recently as March 31, days after the appeal.

Rank-and-file lawmakers have received paychecks of more than $50,800 in the couple weeks since the ruling. The amount paid for per diem and travel varies per member, with some getting as much as an additional $7,745. Ranking members also get some extra pay, as do members holding various committee leadership positions.

The four legislative leaders, House Speaker Michael Madigan, D-Chicago, House Minority Leader Jim Durkin, R-Western Springs, Senate President John Cullerton, D-Chicago, and Senate Minority Leader Christine Radogno, R-Lemont, each have received $71,484 since the judge’s ruling. This pay comes despite the four leaders having failed to pass a full year’s balanced budget in nearly two years.

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Former comptroller Leslie Munger, who implemented the no budget/no pay policy, now acts as deputy governor. She criticized Mendoza, saying an injunction to delay pay should have been filed immediately after the circuit court ruling.

Munger has received more than $58,000 in back pay since the judge’s ruling.

Altogether, lawmakers and constitutional officers have received nearly $12 million, including back pay, in 2017 alone, the bulk of that being paid out since the circuit court judge’s ruling.

Some have questioned whether the windfall back pay will increase the annual pensions of any lawmakers considering retirement in the next couple of years, since pensions are based on the highest annual salaries of state employees in their several years on the job. A senior public service administrator for the State Retirement Systems of Illinois said even if lawmakers were to receive several months of pay in one month, their pension would be based of the annualized salary rate set by statute and the windfall would not artificially spike pensions.

Sure, that’s what they say. I believe it when we actually see what they get as pensions. All sorts of funny biz has gone on re: pension spiking in Illinois.

REACTIONS AND THREATS TO THE BUDGETLESS SITUATION

Let’s whip around and see what various interested parties are saying. The Illinois legislature are currently on break, and of course, no budget has been passed.

Labor leaders, agencies, educators sound off to end Illinois budget impasse:

MOLINE — It’s the sound of dissent from union members without a contract, agencies without funding and educators facing cuts.

“We want a governor who creates jobs, not destroys jobs,” said Dino Leone, Quad City Federation of Labor president, on Monday, April 17.

Speeches call attention to a union, agencies and schools that are hurting without an Illinois budget.

“The more staff cuts you have, obviously, the fewer people you can serve,” said Kathy Doherty, a longtime professional at the Robert Young Center in Rock Island.

It’s a rallying call from some of the state’s most vulnerable residents and programs. They know what it’s like to see programs and services severely scaled back or cut.

“You can’t have a budget get passed on the backs of public workers, on the backs of union members,” said Dan Morris, Rock Island Indivisible.

I suppose y’all will be paying all the extra taxes to cover the pay for yourselves, right?

Did you know that funeral homes could be affected?

MOLINE— There is a plot of land tucked into the back corner of a cemetery in Rock Island County. It’s the final resting place for people who die without the means to pay for a burial.

Rock Island County Coroner Brian Gustafson says last year in the county, 18 people died without enough money to cover funeral costs. If that happens, the bill goes to the state. The deceased qualifies for the help if they already receive public aid.

But with the state trying to save money, state money for funeral costs is one of the first things on the chopping block.

“There’s a great deal of emotional value in having a funeral. We need time to say goodbye. We need time to celebrate the life of an individual who’s died,” says funeral director Eric Trimble.

If the state doesn’t pay for the service, funeral homes would have to agree to cover the service at their own expense.
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Trimble says he’s not surprised by the proposed cut. He says with the state budget crisis, Illinois funeral homes haven’t seen money from the state in months.

Well, sounds like nothing would really change. In one situation, he’s got a piece of paper and is not getting paid. In the other, he doesn’t have a piece of paper, and he’s also not getting paid.

Some politicians are trying to get creative on revenue sources:

Illinois Lawmakers Say Recreational Weed Could Help State Budget Crisis

Lawmakers discussed ways the legalization of recreational marijuana could help Illinois’ state budget woes at a press conference Wednesday.

Two bills now in the General Assembly proposed by Rep. Kelly Cassidy and state Sen. Heather Steans would see a huge cash flow to the state from regulating legal marijuana, the lawmaker says.

One university is canceling classes:

CHICAGO (AP) – Northeastern Illinois University says it will cancel three days of classes in order to cut costs as public universities in Illinois struggle to make ends meet during the state’s budget stalemate.

The Chicago-based university will no longer hold classes April 11, 12 and May 1.

Illinois has been without a budget for 21 months and has a bill backlog of $12.9 billion.

I see these guys don’t count the “temporary” 2016 budget. Also, the backlog has gotten bigger since that April 10 article. Anyway, I’m sure the $30K the university planned on spending on their commencement speaker is just a spit in the bucket for 3 days of classes. [to be fair, at least the speaker dropped her fee once told of the problem]

I wonder if the university is endangering their accreditation by slashing class hours. mmm.

One more closure story — Area senior services provider to shutter its personal care program:

CJE SeniorLife will close its Personal Care Program later this month due to inadequate state funding and the financial crisis in Springfield, officials recently announced.

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Agency officials said that since July 2016, CJE SeniorLife has been reimbursed less that 40 percent of what it was owed by the state.

Over the last nine months, they said in the release, CJE reached out to the Illinois Department on Aging, state legislators and the comptroller’s office to try to get reimbursed for services, but were unsuccessful.

“CJE simply does not have the resources to provide these services indefinitely without jeopardizing the viability of the entire organization,” according to the release.

CJE annually serves more than 23,000 seniors with a wide range of health and human services, according to the organization.

That’s a danger of having a state as one’s primary means of revenue. Especially when said state is in reality bankrupt.

And here’s audio of Mark Glennon of Wirepoints.com discussing budget proposals on Illinois Rising with Dan Proft and Pat Hughes of the Illinois Policy Institute:

PENSION ANGLE

You knew this was coming.

Public finance expert: Pension costs ‘squeeze governments’

Those who are looking closely at how state and municipal governments handle pension costs know the problem is going to require some creativity.

“Whatever share (of budgets) these pension costs are currently making up … it’s likely to increase” Gabriel Petek told Chicago City Wire. Petek is a managing director and sector leader in the U.S. Public Finance States group at S&P Global Ratings in San Francisco.

He said city and state officials are looking anywhere they can to balance finances under pressure.

“Governments will have to make cuts elsewhere,” Petek said.

S&P Global Ratings, which measures the creditworthiness of states and municipalities, has observed “a profound shift unfolding” in states where pension system funding is in distress, Petek wrote for The Hill, specifically citing Illinois, Kentucky and New Jersey.

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A 2016 report calculated that Illinois’ pension debt reached $130 billion last year – a 17 percent increase from 2015 – and account for more than a quarter of the state’s annual budget, according to the Commission on Government Forecasting Accountability.

The combined total cost of unfunded debt related to local and state government retirement commitments is more than $267 billion, the Illinois Policy Institute reported in March.

Whether Republican Gov. Bruce Rauner and legislators in both parties and local government officials succeed in tackling pension problems will likely depend on whether officials adopt the try-everything approach that experts like Petek suggest may lead them out of the debt wilderness.

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Reducing existing pension benefits could give taxpayers some relief, Petek said. That would be good for Illinois resident. The Illinois Policy Institute report calculated that the rise in unfunded pension-related debt shakes out to $56,000 per household in added future taxes.

“It’s easier said than done,” Petek said.

That’s because cutting spending can be complicated. Many parts of state budgets are dictated by law. Others, like cutting contributions to secondary education, pose other challenges.

I just thought I’d mention, yesterday the U.S. Supreme Court refused to pick up the case of the Detroit retirees who had their pensions cut as part of the Detroit bankruptcy workout. This is after a federal appeals court also said it was legal for the pensions to be cut in bankruptcy.

Oh, just something I thought to randomly drop in there.

Compilation of Illinois posts